Large Japanese businesses pared their projections for capital spending this fiscal year, signaling headwinds for Abenomics as a sales-tax rise looms in April.
Big firms plan to boost spending 4.6 percent in the year ending next March, the quarterly Bank of Japan "tankan" report said Monday. That compared with a 5.1 percent projection three months earlier. The slide contrasted with an increase in sentiment among large manufacturers to the highest level since 2007.
Prime Minister Shinzo Abe is trying to persuade businesses to raise wages and investment as part of efforts to catapult the nation out of a 15-year deflationary malaise. While the yen's slide to a five year-low against the dollar last week highlighted the boost to exporters from his "Abenomics" economic policies, companies aren't convinced the recovery will be sustained.